Apartments in Windsor
- Thread starter jseib
- Start date
QUOTE (jseib @ Sep 9 2009, 11:15 PM) I`ve noticed a lot of really outstanding (on the surface) deals in the Windsor area, but seeing so many supposed gems makes me wonder if its to good to be true or if it needs a much higher vacancy variable to determine the right price..
Any insights?
Why invest in Windsor with a shrinking job base ?? North American auto production will fall 30-40% from its peak, thus less jobs.
Invest in a growing part of the world .. not a shrinking one !
If you buy at 20 or 30/door it may make sense as you can cash-flow with a 30-40% vacancy .. manage it yourself and are on top of things daily .. otherwise: stay away !
Not a proven and repeatable business model !
We learned this lesson in Detroit (10km due south) where we bought a 45 suiter for $650,000 two years ago .. or less than 15/door .. but could not cash-flow it even with no mortgage ! We just sold this loser at a steep loss to get out. Huge money, energy and time drain ! Huge !
Just because you buy cheap doesn`t mean you cannot lose money !
Any insights?
Why invest in Windsor with a shrinking job base ?? North American auto production will fall 30-40% from its peak, thus less jobs.
Invest in a growing part of the world .. not a shrinking one !
If you buy at 20 or 30/door it may make sense as you can cash-flow with a 30-40% vacancy .. manage it yourself and are on top of things daily .. otherwise: stay away !
Not a proven and repeatable business model !
We learned this lesson in Detroit (10km due south) where we bought a 45 suiter for $650,000 two years ago .. or less than 15/door .. but could not cash-flow it even with no mortgage ! We just sold this loser at a steep loss to get out. Huge money, energy and time drain ! Huge !
Just because you buy cheap doesn`t mean you cannot lose money !
Hi Thomas
Can you go into detail on your Detroit deal?
Vacancy / rent collections killed it? Or just building purchased had extensive deferred maintenance and burned through cash for this?
QUOTE (thomasbeyer2000 @ Sep 10 2009, 12:03 PM) why invest in Windsor with a shrinking job base. North American auto production will fall 30-40% from its peak, thus less jobs.
Invest in a growing part of the world .. not a shrinking one !
If you buy at 20 or 30/door it may make sense as you can cash-flow with a 30-40% vacancy .. manage it yourself and are on top of things daily .. otherwise: stay away !
Not a proven and repeatable business model !
We learned this lesson in Detroit (10km due south) where we bought a 45 suiter for $650,000 two years ago .. or less than 15/door .. but could not cash-flow it even with no mortgage ! We just sold this loser at a steep loss to get out. Huge money, energy and time drain ! Huge !
Just because you buy cheap doesn`t mean you cannot lose money !
Can you go into detail on your Detroit deal?
Vacancy / rent collections killed it? Or just building purchased had extensive deferred maintenance and burned through cash for this?
QUOTE (thomasbeyer2000 @ Sep 10 2009, 12:03 PM) why invest in Windsor with a shrinking job base. North American auto production will fall 30-40% from its peak, thus less jobs.
Invest in a growing part of the world .. not a shrinking one !
If you buy at 20 or 30/door it may make sense as you can cash-flow with a 30-40% vacancy .. manage it yourself and are on top of things daily .. otherwise: stay away !
Not a proven and repeatable business model !
We learned this lesson in Detroit (10km due south) where we bought a 45 suiter for $650,000 two years ago .. or less than 15/door .. but could not cash-flow it even with no mortgage ! We just sold this loser at a steep loss to get out. Huge money, energy and time drain ! Huge !
Just because you buy cheap doesn`t mean you cannot lose money !
QUOTE (housingrental @ Sep 10 2009, 11:50 AM) Hi Thomas
Can you go into detail on your Detroit deal?
Vacancy / rent collections killed it? Or just building purchased had extensive deferred maintenance and burned through cash for this?
yes .. all of the above .. we thought: 15/door compensates for these known deficiencies .. there is only upside .. WRONG !
Perhaps if we were local and knew all the local tricks and government subsidies and charities we coudl have pulled it off ..
Windsor is likely not as bad as Detroit .. but similar: cold weather (high heating bills !!!!!) .. vacancies .. competition by other landlords .. falling average wages .. falling rents .. rising vacancies .. not exactly a Top 10 town or growth market !
Can you go into detail on your Detroit deal?
Vacancy / rent collections killed it? Or just building purchased had extensive deferred maintenance and burned through cash for this?
yes .. all of the above .. we thought: 15/door compensates for these known deficiencies .. there is only upside .. WRONG !
Perhaps if we were local and knew all the local tricks and government subsidies and charities we coudl have pulled it off ..
Windsor is likely not as bad as Detroit .. but similar: cold weather (high heating bills !!!!!) .. vacancies .. competition by other landlords .. falling average wages .. falling rents .. rising vacancies .. not exactly a Top 10 town or growth market !
Thank you for your insights Thomas.. I went over all the listings in Ontario looking for apartment buildings selling for under 45k/unit and could only find a handful with 80% of them in Windsor which kind of screamed to good to be true.. Looks like thats exactly what it is...
QUOTE (jseib @ Sep 10 2009, 04:11 PM) Thank you for your insights Thomas.. I went over all the listings in Ontario looking for apartment buildings selling for under 45k/unit and could only find a handful with 80% of them in Windsor which kind of screamed to good to be true.. Looks like thats exactly what it is...
write 10 - 15 offers at 25/door .. and then go see ONCE THE OFFER IS ACCEPTED !
write 10 - 15 offers at 25/door .. and then go see ONCE THE OFFER IS ACCEPTED !
Thanks Thomas
If you ever have the time would love to hear a detailed info on Detroit purchase - or also what you / an investor would need to do to make money in a tough to manage in market.
QUOTE (thomasbeyer2000 @ Sep 10 2009, 02:26 PM) yes .. all of the above .. we thought: 15/door compensates for these known deficiencies .. there is only upside .. WRONG !
Perhaps if we were local and knew all the local tricks and government subsidies and charities we coudl have pulled it off ..
Windsor is likely not as bad as Detroit .. but similar: cold weather (high heating bills !!!!!) .. vacancies .. competition by other landlords .. falling average wages .. falling rents .. rising vacancies .. not exactly a Top 10 town or growth market !
If you ever have the time would love to hear a detailed info on Detroit purchase - or also what you / an investor would need to do to make money in a tough to manage in market.
QUOTE (thomasbeyer2000 @ Sep 10 2009, 02:26 PM) yes .. all of the above .. we thought: 15/door compensates for these known deficiencies .. there is only upside .. WRONG !
Perhaps if we were local and knew all the local tricks and government subsidies and charities we coudl have pulled it off ..
Windsor is likely not as bad as Detroit .. but similar: cold weather (high heating bills !!!!!) .. vacancies .. competition by other landlords .. falling average wages .. falling rents .. rising vacancies .. not exactly a Top 10 town or growth market !
QUOTE (housingrental @ Sep 11 2009, 11:12 AM) Thanks Thomas
If you ever have the time would love to hear a detailed info on Detroit purchase - or also what you / an investor would need to do to make money in a tough to manage in market.
buy cheap .. VERY cheap .... and manage tightly .. or stay away !
sometimes $1 might be overpriced due to deferrerd maintenance or liabilities !
If you ever have the time would love to hear a detailed info on Detroit purchase - or also what you / an investor would need to do to make money in a tough to manage in market.
buy cheap .. VERY cheap .... and manage tightly .. or stay away !
sometimes $1 might be overpriced due to deferrerd maintenance or liabilities !
Interesting discussion.
Thank You Thomas for sharing. It was a brave move to purchase that 45-suiter in Detroit!
Like Adam, I am also trying to understand better what was the MAIN issue causing the loss and eventual sale of that apartment building in Detroit:
- was it very few huge unexpected maintenance issues (i.e. foundation, walls, vandalism..) OR was it more an unexpected high ongoing expenses
(i.e. 75% of rent a month(!) instead of the expected 50%)?
Lastly, for how long did you own the building: 1 year or like 3-5 years?
Regards,
Neil
Thank You Thomas for sharing. It was a brave move to purchase that 45-suiter in Detroit!
Like Adam, I am also trying to understand better what was the MAIN issue causing the loss and eventual sale of that apartment building in Detroit:
- was it very few huge unexpected maintenance issues (i.e. foundation, walls, vandalism..) OR was it more an unexpected high ongoing expenses
(i.e. 75% of rent a month(!) instead of the expected 50%)?
Lastly, for how long did you own the building: 1 year or like 3-5 years?
Regards,
Neil
QUOTE (investmart @ Sep 11 2009, 07:12 PM) Interesting discussion.
Thank You Thomas for sharing. It was a brave move to purchase that 45-suiter in Detroit!
Like Adam, I am also trying to understand better what was the MAIN issue causing the loss and eventual sale of that apartment building in Detroit:
- was it very few huge unexpected maintenance issues (i.e. foundation, walls, vandalism..) OR was it more an unexpected high ongoing expenses
(i.e. 75% of rent a month(!) instead of the expected 50%)?
Lastly, for how long did you own the building: 1 year or like 3-5 years?
Regards,
Neil
no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
Thank You Thomas for sharing. It was a brave move to purchase that 45-suiter in Detroit!
Like Adam, I am also trying to understand better what was the MAIN issue causing the loss and eventual sale of that apartment building in Detroit:
- was it very few huge unexpected maintenance issues (i.e. foundation, walls, vandalism..) OR was it more an unexpected high ongoing expenses
(i.e. 75% of rent a month(!) instead of the expected 50%)?
Lastly, for how long did you own the building: 1 year or like 3-5 years?
Regards,
Neil
no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
I had looked at the Windsor market a bit too recently for my first property. There is quite a bit of talk of lowering industry and commercial taxes to spur regrowth as well as the talk of the high speed rail line that is expected to include Windsor. At this point it would be speculating.
The one element that kept me interested long enough to keep researching is the university and college with the university making some large expansions.
For me it`s too much of a risk and I`ve settled on a closer less risky area for myself.
It`s just something to keep in mind because Windsor isn`t a single industry town and the local government is taking steps to reinvent itself. I personally think it`ll be a great buy for some investors, however the rate of unoccupancies is far too high for me to risk it at this point.
Hamilton has some great deals as well and I believe is on the verge of breaking out now that GO Transit and the local transit have merged. Hamilton also has both a university and a college.
Just something to think about. If you think you can market better a fill your units you might find some real gems.
Steve White
QUOTE (thomasbeyer2000 @ Sep 11 2009, 10:47 PM) no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
The one element that kept me interested long enough to keep researching is the university and college with the university making some large expansions.
For me it`s too much of a risk and I`ve settled on a closer less risky area for myself.
It`s just something to keep in mind because Windsor isn`t a single industry town and the local government is taking steps to reinvent itself. I personally think it`ll be a great buy for some investors, however the rate of unoccupancies is far too high for me to risk it at this point.
Hamilton has some great deals as well and I believe is on the verge of breaking out now that GO Transit and the local transit have merged. Hamilton also has both a university and a college.
Just something to think about. If you think you can market better a fill your units you might find some real gems.
Steve White
QUOTE (thomasbeyer2000 @ Sep 11 2009, 10:47 PM) no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
Thanks Thomas
Are there feasible investments with better kept / newer builds? Or is occupancy / collections issues insurmountable?
QUOTE (thomasbeyer2000 @ Sep 11 2009, 10:47 PM) no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
Are there feasible investments with better kept / newer builds? Or is occupancy / collections issues insurmountable?
QUOTE (thomasbeyer2000 @ Sep 11 2009, 10:47 PM) no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
QUOTE (thomasbeyer2000 @ Sep 11 2009, 07:47 PM) no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
Wow, what an experience! Glad it`s behind you. Thanks.
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.
Wow, what an experience! Glad it`s behind you. Thanks.
QUOTE (stevegwhite @ Sep 11 2009, 10:49 PM) I had looked at the Windsor market a bit too recently for my first property. There is quite a bit of talk of lowering industry and commercial taxes to spur regrowth as well as the talk of the high speed rail line that is expected to include Windsor. At this point it would be speculating.
The one element that kept me interested long enough to keep researching is the university and college with the university making some large expansions.
For me it`s too much of a risk and I`ve settled on a closer less risky area for myself.
It`s just something to keep in mind because Windsor isn`t a single industry town and the local government is taking steps to reinvent itself. I personally think it`ll be a great buy for some investors, however the rate of unoccupancies is far too high for me to risk it at this point.
Hamilton has some great deals as well and I believe is on the verge of breaking out now that GO Transit and the local transit have merged. Hamilton also has both a university and a college.
Just something to think about. If you think you can market better a fill your units you might find some real gems.
Steve White
Hello Steve,
I have been trying to close some deal in Hamilton at a Cap Rate of 7%. But, it seems that most rental properties are now overpriced as sellers do not accept my offers.
Any tips on how to close a deal on students rentals around Mac Master U and Mohawk C? Thanks for your input.
FHC
The one element that kept me interested long enough to keep researching is the university and college with the university making some large expansions.
For me it`s too much of a risk and I`ve settled on a closer less risky area for myself.
It`s just something to keep in mind because Windsor isn`t a single industry town and the local government is taking steps to reinvent itself. I personally think it`ll be a great buy for some investors, however the rate of unoccupancies is far too high for me to risk it at this point.
Hamilton has some great deals as well and I believe is on the verge of breaking out now that GO Transit and the local transit have merged. Hamilton also has both a university and a college.
Just something to think about. If you think you can market better a fill your units you might find some real gems.
Steve White
Hello Steve,
I have been trying to close some deal in Hamilton at a Cap Rate of 7%. But, it seems that most rental properties are now overpriced as sellers do not accept my offers.
Any tips on how to close a deal on students rentals around Mac Master U and Mohawk C? Thanks for your input.
FHC
QUOTE (FHC @ Sep 12 2009, 10:06 AM) .. But, it seems that most rental properties are now overpriced as sellers do not accept my offers.
..
Overpriced by whose metrics ? Yours ? The sellers ? Realtors ? CMHC ? Common Sense ?
Keep in mind that HUGE cash sits on the sidelines unwilling to go back into the stock market - both here and in the US and in Europa and in Asia ! Thus, alternative investment classes, like commercial real estate (e.g. apartment buildings, ..) in safe areas of the world will command TOP DOLLARS .. and certainly as long as cheap CMHC money around 4% is available !!
..
Overpriced by whose metrics ? Yours ? The sellers ? Realtors ? CMHC ? Common Sense ?
Keep in mind that HUGE cash sits on the sidelines unwilling to go back into the stock market - both here and in the US and in Europa and in Asia ! Thus, alternative investment classes, like commercial real estate (e.g. apartment buildings, ..) in safe areas of the world will command TOP DOLLARS .. and certainly as long as cheap CMHC money around 4% is available !!